Binjiang Group(002244) HTSC·2024-10-31 06:00Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a revenue of 40.78 billion RMB for the first three quarters of 2024, a year-on-year decrease of 12%, and a net profit attributable to shareholders of 1.63 billion RMB, down 34% year-on-year. Despite the performance decline, the company has ample resources to be recognized, and with the peak delivery period in Q4 approaching, there is optimism for profit recovery throughout the year [1][2] - The company's land reserves are concentrated in Hangzhou, which is expected to benefit first from the recovery of the real estate market in core cities. The company is maintaining a strong land acquisition strategy while improving its financial stability [1][2] - The company plans to deliver a total construction area of 4.43 million square meters in 2024, a year-on-year increase of 7%, primarily concentrated in Q4. The contract liabilities for 2023 revenue stand at 192%, indicating sufficient resources for future revenue recognition [2] Summary by Sections Financial Performance - The company's net profit attributable to shareholders decreased due to a smaller revenue recognition scale and a decline in gross margin by 4.6 percentage points to 10.4%. The decline in profit was partially offset by reduced impairment losses and a decrease in minority interest [2] - As of Q3 2024, the company maintained a green status on its three red lines, with a short-term debt coverage ratio rising to 457% due to continuous reduction in short-term borrowings, further enhancing financial stability [3] Profit Forecast and Valuation - The report maintains the earnings per share (EPS) forecast for 2024-2026 at 0.90, 0.95, and 0.98 RMB respectively. The average price-to-earnings ratio (PE) for comparable companies is projected at 10 times, while the company is considered to have a reasonable PE of 13 times, leading to a target price of 12.35 RMB, up from a previous value of 10.80 RMB [4][5]